UPDATE: This post has been edited to reflect changes in Kola Aluko’s stake in Seven Energy
Seven Energy, a leading Nigerian energy firm which was co-founded by Kola Aluko, a prominent Nigerian business tycoon, has closed a financing round that now values the company at nearly $1 billion.
Early last week, Temasek, the investment holding company owned by the Government of Singapore, made a $150 million investment in Seven Energy, a privately-held Nigerian oil and gas exploration company that Aluko co-founded in 2004. Temasek’s investment follows a similar $105 million investment made recently by the International Finance Corporation (IFC) in Seven Energy. Together, these two investors now hold a 26% stake in the indigenous oil company. Temasek is the company’s largest shareholder with a 15.6% stake, while Aluko, 44, owns 9% of the company’s equity, according to a recent email from Aluko’s media representative, Joséphine Dunn. (UPDATE: Seven Energy’s media representatives say Aluko now owns only 1% on a fully diluted basis).
In a press release issued by Seven Energy earlier this week, the company said it plans to use the funds to develop its growing portfolio of assets in Nigeria, where the group is focusing on the development of upstream reserves and resources and gas infrastructure to provide gas to the domestic market for power generation and industrial consumption.
Kola Aluko
Kola Aluko founded oil exploration company Exoro Energy in 2004 after a successful career in oil trading. That same year, Exoro partnered with Energy Ventures International, a Nigerian subsidiary of Weatherford, a Swiss-based oil and gas servicing firm, to market the latter’s exploration and production technology in Nigeria. Energy Ventures subsequently changed its name to Seven Energy, and in 2007, Aluko led a management buy-out of Seven Energy. The company began acquiring Nigerian oil producing assets in 2009. Aluko left the company’s management and board in 2011.
But Aluko’s stake in Seven Energy is not his largest asset. That would be his 50% stake in Atlantic Energy, a private upstream Oil and Gas Company that has a very lucrative, albeit highly controversial Strategic Alliance Agreement (SAA) with the government-owned Nigerian Petroleum Development Company (NPDC) in relation to 4 prolific oil-producing oil blocks – OML 26, OML 30, OML 34 and OML 42. NPDC, which is the operating arm of the Nigerian National Petroleum Corporation (NNPC), owns 55% in each of these oil blocks, which collectively produce an average of over 108,000 barrels of oil equivalent per day. Under the agreement Atlantic Energy currently has with NPDC, Atlantic Energy funds NPDC’s share of the operating costs of the 4 oil blocks by paying the latter’s entire cash obligations. In return for funding NPDC’s operating and capital activity costs, Atlantic Energy gets back costs, meaning that NPDC pays back to Atlantic Energy the initial money used to finance the operating costs, and also earns 35% of profits on the 4 oil blocks. According to its website, Atlantic Energy has spent a little over $500 million on the oil blocs over the last two years. The company is believed to have earned hundreds of millions of dollars from its share of profits during the period. The government-owned NPDC has not reported its share of the profits on the oil blocks it co-owns. Because of his various stakes in oil companies and the profits they have thrown off, Kola Aluko has been on our radar for the annual Forbes Billionaires List and Forbes list of Africa’s 50 Richest.
Aluko, who has recently been in the media spotlight for his closeness to stars like Naomi Campbell and Hollywood A-lister Leonardo DiCaprio, is also a co-founder of the Made In Africa Foundation, a UK nonprofit that supports and funds master plans and feasibility studies for large scale infrastructure projects across Africa. He owns a 65-meter Galactica Star Yacht which is said to cost upward of $50 million and he divides his time between a $40 million home in Los Angeles, an $8.6 million duplex on Fifth Avenue in New York and other homes in Abuja and Geneva, Switzerland.
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Nigerian Oil Tycoon Kola Aluko"s Seven Energy Raises $150 M From Singapore ...
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